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TMI Blog2024 (12) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... received by the assessee during the year was already repaid. Accordingly, he came to the conclusion that identity, creditworthiness and genuineness was established by the assessee. Therefore, we do not see any reason to disturb the findings of ld. CIT(A). Crayons Advertising Pvt. Ltd., ld. CIT (A) deleted the addition with the observation that the said company has filed the reply u/s 133 (6) of the Act before the Assessing Officer and confirmed the transactions. He also observed that they have declared an income in their return of income. Therefore, we are inclined to accept the same. Mani Mudra Vincom Pvt. Ltd., this company also replied to the notice issued/ u/s 133(6) of the Act during the remand proceedings and they have confirmed the transactions before ld. CIT(A). Further, he observed that the assessee also paid interest @ 12% after deducting TDS and all these transactions were routed through banking channel, they also submitted copy of bank statements, copy of books of account and Balance Sheet along with return of income. Accordingly, ld. CIT (A) after due consideration gave the relief. Therefore, we are inclined to accept the same. Omni Media Communication Pvt. Ltd., ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem and ld. CIT (A) while verifying the assessment record found that no such reply was received by the Assessing Officer and not found any other documents substantiating the transactions. Accordingly, he sustained the addition of Rs. 1 crore. After considering the details findings of the ld. CIT (A), since there is no submission made by either party on addition of Rs. 1 crore towards M/s. Ambika Tradeexpo Pvt. Ltd., we are not sustaining the same. Accordingly, the appeal filed by the Revenue is dismissed. - Shri S.Rifaur Rahman, Accountant Member And Shri Sudhir Pareek, Judicial Member For the Assessee : Shri Mohit Gupta, CA For the Revenue : Shri Kanv Bali, Sr. DR ORDER PER S. RIFAUR RAHMAN,AM: 1. This appeal is filed by the Revenue against the order of ld. Commissioner of Income-tax (Appeals)-I, New Delhi [hereinafter referred to Ld. CIT (A) ] dated 28.02.2017 and assessee has also filed cross objection for Assessment Year 2012-13. 2. Brief facts of the case are, assessee filed its return of income declaring loss of Rs. 18,69,022/- on 01.10.2013. The case was selected for scrutiny under CASS. Accordingly, notices under section 143(2) and 142(1) of the Income-tax Act, 1961 (for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17.08.2016 has neither been received back nor any reply received. Another letter dated 30.09.2016 was sent on the similar address as provided by the assessee. This notice has been returned back with the remarks Left . The assessee vide letter dated 23.11.2016 was asked to offer his comments on the above observation The assessee vide letter dated 09.12.2016 submitted that the address of Mr. Manoj Sethi has been changed from B-179, Greater Kail ash, Part-1, New Delhi-110048 to W- 12, Ground Floor, Greater Kailash-ll, New Delhi. Sh. Manoj Sethi vide his letter dated 16.12 2016 submitted his confirmation that an amount of Rs. 92,27,000/- was given as unsecured loan to the assessee company during the relevant assessment year. Sh. Manoj Sethi is the director of the assessee company. 2. M/s Crayons Advertising Ltd., NSIC Complex, Maa Anandmayee Marg, Okhla Industrial Estate, Phase- Ill, New Delhi-110020 Reply was received vide letter dated 25.08.2016 However, the party has denied to have provided any loan and advances to the assessee. Copy of the response received is enclosed herewith. The assessee vide letter dated 23.11.2016 was asked to offer his comments on the above observation. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application money instead of loans and advances. It is a matter of change in grouping of the amount in balance sheet of the company. The company have been received and share application from M/s Omni Media Communication Pvt. Ltd. However, no further confirmation has been filed. 5. M/s Pawansut Media Services (P) Ltd., 1837/138, Shanti Nagar Trinagar, New Delhi 35 Letters dated 17.8.2016 and 30.9.2016 were sent to the party. Both the letters have returned back with the remarks left . The assessee vide letter dated 23.11.2016 was asked to offer his comments on the above observation. The assessee vide letter dated 09.12.2016 submitted that, in respect of M/s Pawansut Media Services Pvt Ltd, the address of the company has been changed from 1837/138, Shanti Nagar, Tri Nagar, New Delhi to B-8/38, Ansal Tower, Nehru Place, New Delhi-110019. In view of the above submission by the assessee, information u/s 133(6) was called vide letter dated 20.12 2016 from M/s Pawansut Media Services (P) Ltd at the new address. The party vide letter dated 27.12.2016 which was received on 3.11.2017 has submitted that it has given an amount of Rs. 25,00,000/- during the AY 2012-13 to the assessee company as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Media Communication (P)Ltd., M/s. Pawansut Media Services (P) Ltd., M/s. Real Vyapar (P) Ltd. and Ambica Tradeexpo (P) Ltd. in his order and he deleted the additions made by the Assessing Officer to the extent of Rs. 5,58,28,164 and sustained addition of Rs. 1 crore received from Ambica Tradeexpo (P) Ltd. with the following observations :- I have considered the submission of the appellant and the information filed by the appellant in the remand proceedings and verification done by the AO u/s. 133(6) in the remand proceedings. It is seen that identity, creditworthiness and genuineness of the transaction in respect of Sh. Manoj Sethi, Crayon Advertising Pvt. Ltd., Money Mudra Vincom Pvt. Ltd., Omni Media Communication Pvt. Ltd., Pawansut Media Services Pvt Ltd. and Real Vyapar Pvt. Ltd. has been established, therefore, the loan as well as share application money received from these companies to the extent of Rs. 5,58,28,164/- is held to be explained and addition to that extent made by the AO u/s. 68 is deleted. However, the loan shown from Ambika Tradexpo Pvt. Ltd. of Rs. 1,00,00,000 has not been proved by the appellant. In the case of said company, the appellant has failed to prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT, Mumbai in ITA No.1835 1836/Mum/2014 M/s Royal Rich Developers Pvt. Ltd. vs DCIT Dated 24.08.2016 has held that it is for the assessee to explain the creditworthiness of the share subscribers and genuineness of the transaction including the source of source. He further submitted that in this regard, the ITAT held that section 68 of the Act amended by Finance Act 2012, w.e.f 01.04.2013 is clarificatory in nature and hence would apply retrospectively where by the onus is cast upon the assessee to justify the source of share subscription including share premium raised and to explain the source of source of raising the share subscription and ITAT, Mumbai has relied upon the decision of ITAT, Kolkata in the case of Subhlakshmi Vanijya (P) Ltd. Vs CIT (2015) 60 Taxmann.com 60 (Kolkata) in the above matter. He further submitted that similarly it is still not known whether the assessee has issued shares to M/s Cryons Advertising Ltd and M/s Omni Media Communications Pvt Ltd from whom amounts have been received for share subscription. In this regard, he placed reliance on further following decisions for genuineness of the transactions and creditworthiness and capacity to pay :- 1. PCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any previous year, the same may be charged to income tax .... . We are unable to accept the submission that any further investigation is futile because the money was received on capital account. The Special Bench in the case of Sophia Finance Ltd. (supra) opined that the use of the words any sum found credited in the books in Section 68 indicates that the said section is very widely worded and an Income-tax Officer is not precluded from making an enquiry as to the true nature and source thereof even if the same is credited as receipt of share application money. Mere fact that the payment was received by cheque or that the applicants were companies, borne on the file of Registrar of Companies were held to be neutral facts and did not prove that the transaction was genuine as was held in the case of Nova Promoters and Finlease (P) Ltd. (supra). Similar views were expressed by this Court in the case of Precision Finance (P.) Ltd. (supra). We need not decide in this case as to whether the proviso to Section 68 of the Income Tax Act is retrospective in nature. To that extent the question is kept open. We may however point out that the Special Bench of Delhi High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osited in cash purportedly in the books of M/s Indwheels stated to be a partnership firm and from where the amounts have been withdrawn and credited to the account of Sh. Sanjay Gupta in the books of the assessed company. It is the case of the Revenue that the same cash deposits could have been made in the books of the assessed company and the method of choosing the circuitous path is only an attempt to circumvent the provisions of Section 68 of Act. 5. Commissioner of Income Tax Vs Precision Finance Pvt. Ltd. (1994) 208 ITR 465 (Cal) It is for the assessee to prove the identity of the creditors, their creditworthiness and the genuineness of the transactions. In our view, on the facts of this case, the Tribunal did not take into account all these ingredients which have to be satisfied by the assessee. Mere furnishing of the particulars is not enough. The enquiry of the Income-tax Officer revealed that either the assessee was not traceable or there was no such file and, accordingly, the first ingredient as to the identity of the creditors had not been established. If the identity of the creditors had not been established, consequently the question of establishment of the genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pp. money pending allotment of Rs. 45,00,000/-. In view of the said facts, the identity, creditworthiness genuineness of the transactions held established. 4 M/s. Pawansut Media Services (P) Ltd. The appellant filed the confirmation along with copy of bank statement, bal sheet ITR of the said company and copy of the ledger account of company in appellant's books. The said company also confirmed the said transaction. The party has shown SH Funds of Rs. 17,70,700/-, R S of Rs. 15,71,31,687/- and investment of Rs. 15.01 cr. In view of the said facts, the identity, creditworthiness genuineness of the transactions held established. 5 M/s. Real Vyapar (P) Ltd. The appellant filed the confirmation along with copy of bank statement, bal sheet ITR of the said company and copy of the ledger account of company in appellant's books. The said company also confirmed the said transaction. The party has shareholder funds of Rs. 51,38,168/- and short-term borrowings of Rs. 6.90 cr and loan adv at Rs. 4,33,75,000/-. In view of the said facts, the identity, creditworthiness genuineness of the transactions held established. Further, the said amount has also been repaid by the appellant vide ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue needs to be dismissed. 10. Ld. AR further submitted that issue, Where the assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants/loans by submitting the PAN details, bank account statements, audited financial statements, balance sheet, profit and loss account and Income Tax acknowledgments and confirmations etc., the addition under section 68 is not warranted. In this regard, he placed reliance on the following judgments :- (a) CIT V Fair Investment Ltd. 357 ITR 146 (b) CIT V. Lovely Exports Ltd. (2008) 216 CTR 195 (SC) (c) CIT V. Kamdhenu Steel and Alloys Ltd. 361 ITR 220 (Del HC) (d) CIT V. Vrindavan Farms Pvt. Ltd. ITA 71 of 2015 (Del HC) (e) CIT V. Laxman Industrial Resources Pvt. Ltd. ITA 169 of 2017 dated 14th March 2017 ( Del HC) (f) Dwarakadhish Investment P. Ltd. ( ITA No. 911 of 2010 ) (Del HC) (g) Dwarkadhish Capital P. Ltd. ( ITA No. 913 of 2010) (Del HC) (h) CIT V. Winstralpetrochemicals P. Ltd. 330 ITR 603 (Del HC) (i) CIT V. Value Capital Services Pvt. Ltd. (2008) 307 ITR 334 (Del HC) (j) Pro CIT V. Kurele Paper Mills P. Ltd. 380 ITR 571 (Del HC) (k) Hon'ble High Court order in CIT vs; Gangeshwari Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccept the same. 13. With regard to Mani Mudra Vincom Pvt. Ltd., this company also replied to the notice issued/ u/s 133(6) of the Act during the remand proceedings and they have confirmed the transactions before ld. CIT(A). Further, he observed that the assessee also paid interest @ 12% after deducting TDS and all these transactions were routed through banking channel, they also submitted copy of bank statements, copy of books of account and Balance Sheet along with return of income. Accordingly, ld. CIT (A) after due consideration gave the relief. Therefore, we are inclined to accept the same. 14. With regard to Omni Media Communication Pvt. Ltd., ld. CIT (A) observed that this amount also received by the assessee through banking channel. This company also submitted the confirmations in reply to notice issued u/s 133 (6) of the Act during remand proceedings. However, he noticed misclassification of the above loan as share application money paid by them. However, assessee has shown the same in loans and advances . Since it is a minor error on the part of classification by the assessee, however the company has submitted the confirmation of transaction. Accordingly, ld. CIT (A) found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings of ld. CIT(A). 17. Further, with regard to loan from M/s. Ambika Tradeexpo Pvt. Ltd., ld. CIT (A) observed that on receipt of loan of Rs. 1 crore from M/s. Ambika Tradeexpo Pvt.Ltd. vide cheques dated 04.06.2011 and 09.06.2011, assessee has filed confirmations from them. However, he also observed that during remand proceedings, they have not replied to the Assessing Officer. Further when the assessee was updated with the fact and assessee has submitted that assessee will provide the confirmation from them and ld. CIT (A) while verifying the assessment record found that no such reply was received by the Assessing Officer and not found any other documents substantiating the transactions. Accordingly, he sustained the addition of Rs. 1 crore. 18. After considering the details findings of the ld. CIT (A), since there is no submission made by either party on addition of Rs. 1 crore towards M/s. Ambika Tradeexpo Pvt. Ltd., we are not sustaining the same. Accordingly, the appeal filed by the Revenue is dismissed. 19. Further, assessee has filed cross objections to the extent of objections raised relating to appeal filed by the Revenue, since we are already adjudicated in favour o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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